Category: Financial Aid

Quartz: “While Americans without university degrees have seen a fair rise in household income in recent years, they still lag far behind their college-educated peers. Per triennial data from the US Federal Reserve published this week, people with college degrees these days have a median net worth more than four times that of people without.”

“It’s not that college-educated Americans are making dramatically more money than before—in fact, their median net worth has only grown 2% between 2013 and 2016—but rather that those without college degrees still have a long way to go to catch up. In that three-year period for which Fed data was collected, the median net worth for those with only a high school diploma actually jumped around 25%, from $54,100 to $67,100. But the median net worth for those with college degrees is $292,100.”

The New York Times: “In the minds of parents and teenagers going through the college application process, May 1 is a magic date. At that point, you’ve sent in a deposit, bought a sticker for your car window and posted your choice on social media. This year, however, scores of teenagers had something unexpected happen next: During the first week in May, they received text messages or emails from schools that had accepted them but had not heard back. The messages all hinted at a particular question: Might a larger discount prompt you to come here after all?”

“The upheaval that comes with reopening the college decision is rough on teenagers as well as their parents, who would have to revisit difficult financial choices and conversations all over again. Suddenly, a first-choice school may be almost within reach but still not quite affordable. The injection of money into a discussion thought to be over makes an emotional situation even more fraught … Now that applicants, even in wealthier families, know how much of a stretch college might be, it can weigh them down with guilt.”

“For a portion of the applicant pool, May 1 has not been the date for some time. Many colleges maintain wait lists … And for all the attention families devote to the most competitive institutions, plenty more have space available through summer and invite qualified students to apply. The National Association for College Admission Counseling, or Nacac, publishes a list each year, and this year’s lineup includes household names like Arizona State and Penn State.”

NPR: “Georgetown University will be offering an admissions edge to descendants of enslaved people sold to fund the school … Jesuit priests connected to the private Catholic university sold 272 enslaved people in 1838, to pay off the university’s massive debts. The men, women and children were sold to plantations in Louisiana; the university received the equivalent of $3.3 million, securing its survival.”

Georgetown will treat “the descendants of those enslaved people the same way it treats legacy students, applicants whose family members attended Georgetown … The working group had also recommended that Georgetown explore the feasibility of offering financial assistance for those students as well.”

“Additionally, the school will be renaming two buildings — formerly named after the two university presidents who made the arrangements to sell slaves to fund the school … One will become Isaac Hall, after one of the enslaved men who was sold in 1838, and another Anne Marie Becraft Hall, after a black educator and nun … Georgetown will also establish a memorial to the people whose enslavement funded and built the school, offer a mass of reconciliation and work to promote scholarship in the field of racial justice, it says.”

The Wall Street Journal: “Low graduation rates hurt a school’s reputation, and staying enrolled for extra years adds to the tab for students. So dozens of schools and statewide systems are trying to cut back on the number of ‘super seniors’ milling about campus.”

“Schools have embraced marketing gimmicks like ‘Class of ’17’ bumper stickers to rally students around their graduation year. But they also are changing how they price a semester to make it easier to stay on pace to graduate, notifying students eligible to graduate that they should do so soon, and altering the classes offered in a given term to help students take the courses they need.”

“Nationally, four in 10 students who entered college for the first time as full-time freshmen in 2008 graduated within four years. The six-year rate hovers around 60% … Meanwhile, students who are ready to move on can struggle to get credit for how far they have come. With more than one-third of students now attending multiple institutions during their college careers, convoluted credit-transfer policies continue to slow the timeline to graduation.”

The Washington Post: “Wells Fargo is offering Amazon.com customers discounted interest rates on private student loans, creating a partnership with the online retail giant at a time when private lenders are fighting for market share.”

“Amazon Prime Student subscribers who apply for any of the bank’s education loan products are eligible to have their interest rate lowered by half a percentage point. Wells will take off an additional quarter of a percentage point for borrowers who enroll in an automatic monthly loan repayment plan. Interest rates on Wells undergraduate loans for four-year colleges range from 5.94 percent to nearly 11 percent on a fixed-rate loan and 3.39 percent to 9.03 percent on a variable-rate loan. Students who enlist a parent or grandparent on the loan can get lower rates because co-signers are obligated to repay the debt if the borrower does not.”

“As it stands, interest rates on federal student loans are at an all-time low. Undergraduate students can expect to pay 3.76 percent in interest on new Stafford loans for the 2016-2017 academic year, while graduate students will be charged 5.31 percent interest. Government loans are only offered at fixed rates and students don’t need co-signers with stellar credit to qualify for the lowest rate. What’s more, federal student loan borrowers can take advantage of the government’s income-driven repayment plans that cap monthly payments to a percentage of their earnings. There is nothing comparable in the private market.”

Pauline Abernathy, vice president of the Institute for College Access & Success (TICAS), comments: “Amazon and Wells Fargo are trumpeting a discount while burying the sky-high rates on these private loans and without noting that they lack the consumer protections and flexible repayment options that come with federal student loans. It is a cynical attempt to dupe current students who are eligible for federal students loans with a record-low 3.76 percent fixed interest rate into taking out costly private loans with variable interest rates currently as high as 13.74 percent.”

Money: “About a quarter of parents each year face the daunting prospect of paying for an extra year (or two, or three) of college, according to student loan lender Sallie Mae’s latest survey. The situation comes up so often that financial planner Allan Katz … has all his clients save for five years of tuition instead of four … Even that kind of preparation does not stop many parents from panicking when their child gets to junior year without enough credits to get a degree in four years.”

Financial planner Hank Mulvihill … takes it even further. He tells clients to expect to pay $50,000 a year for six years … During his 25 years as a planner, Mulvihill has seen the chips fall every which way. One family recently faced an extra year of tuition at a private university but simply did not have another $65,000. So the student had to transfer to an in-state public school to finish her studies.”

“Fear of going overtime in college has prompted some parents to push their children to stack up credits in high school so they can graduate college either early or on time … These are lessons that Frost Gordon will take to heart when her younger son applies to colleges next year. ‘I’m going to be more conscious about my spending now and plan for a fifth year,’ she said. ‘And I’m going to ask on the tours how many kids are getting an undergrad degree in four years’.”

Inside Higher Ed: Tipping Point author “Malcolm Gladwell says a trade-off exists between high-quality campus dining and admitting low-income students … Letting students make do with mediocre food would enable colleges to admit more low-income students and provide them with the aid and support they need to succeed, he maintains.”

“In his new podcast series, Revisionist History, he makes this point by contrasting Bowdoin College, which is regularly cited by campus guides for outstanding food, with Vassar College, where students tell him the food is mediocre. Both are elite liberal arts colleges, with highly competitive admissions, respected faculty members and beautiful campuses. But Vassar enrolls a much larger share of low-income students than Bowdoin, and Gladwell blames the gourmet food Bowdoin students enjoy.”

“While many agree that colleges can and should do much more than they are doing now to increase the admission of low-income students, many question whether Gladwell’s focus on dining makes sense.” Bowdoin responds that it “is among the very small number of colleges that are need blind on admissions, meet full need and never use loans in any part of an aid package.” In addition: “No funds from the endowment or other revenue sources pay for dining, the college says.”

Slate: “In the coming year, we will see changes in standardized testing, use of prior-prior year tax information in applying for financial aid, elimination of colleges’ access to the selected institution list on the Free Application for Federal Student Aid, and the likely expansion of Simplified Needs Testing resulting from Medicaid expansion. These and other factors like demographic shifts, ability to pay, and public support for higher education represent unprecedented changes to the world of college admissions.”

“The wealthiest and most selective will continue on their tried and true paths, and open-access institutions will serve out their missions in the way they always have. But most colleges are working desperately to navigate the changes in a way that is not harmful to them and genuinely benefits students, especially those with the greatest need.”

CNBC: “When students and families weigh everything that goes into attending college, not least the cost, ‘the plan B schools sometimes are a better fit,’ said Katherine Pastor, a school counselor at Flagstaff High School in Arizona.” In fact, ‘close to 17 percent of first-time freshmen were accepted at their top school and chose to attend somewhere else,” according to UCLA’s Higher Education Research Institute.

“Some 58 percent of those enrolling at their second-choice school said cost was an issue, compared with 41 percent of those attending their first choice,” according to the Institute. “Students opting for their first-choice school, in contrast, were more likely to cite graduates’ record of landing good jobs or getting into top graduate or professional schools. They were also more likely to mention their school’s strong academic record, the Institute found.”

“Pastor, the Arizona school counselor, said she hears about students who set off for their first choice, only to find that it is not a good fit … Outcomes like that can be particularly difficult if a student has passed on scholarships and aid offers from a second-choice school, and now has to restart the process. The upside may be this, however: ‘I have never heard of a kid who picked their second-choice school who has not been happy with their choice,’ Pastor said.”

Business Insider: “What some applicants might not know is that it is possible to bargain with colleges on your financial aid package.” Kwasi Enin, who was accepted by all eight Ivy League schools, offers this advice:

“I took Princeton’s letter and I emailed that to Yale, Columbia, and Penn. Within like a week, they all sent me a new financial aid offer on their financial aid website and they matched the same offer.”

“You need to send them a nice letter saying, ‘I love your school but I have a better offer at a similarly ranked school called ‘X’ and if you can find a way to make it possible that I can attend this school by making the aid work out, that would be wonderful.'”

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Beth Manners holds a certificate in College Admissions Counseling from UCLA and is graduate of Tufts University, for which she has been an applicant interviewer for 15 years. She also has an MBA.